Vietnam has been struggling to deal with a number of major economic problems over the past year. The inflation rate of Vietnam’s currency, the dong, has been rapidly rising, while major corporations, such as shipbuilder Vinashin, hovers on the brink of bankruptcy. According to Bloomberg News (October 5, 2011), Vietnam’s inflation rate has exceeded 20%, becoming the highest of the 17 countries in Southeast Asia. The country is also facing big trade deficits, brewing difficulties in the banking industry, and continued decline in investor confidence.

Many different causes can be attributed to Vietnam’s economic woes, but none are more prevalent than the corruption and poor, incompetent management that is the Vietnamese government. It is true that the world is at risk of facing another economic downturn and that many other countries are facing their own economic problems. However, in the case of Vietnam, the problem stems much deeper than the simple shortcomings of their monetary and fiscal policies. The problem is what happens behind the scenes of the Communist Party, and how atrociously the government is running the country.

Analysts often describe Vietnam’s economy on the same level as other nations, as if the country was transparent and fair like its counterparts in the global market. Though this is the fair method of measurement, putting Vietnam on equal grounds with other more democratic countries, it fails to bring to light the real shortcomings of how Vietnam’s economy is run. It is not just the policies on the surface that is the cause of the downward spiral of Vietnam’s economy. The economic issues in Vietnam have less to do with the global market, and more with the leaders themselves.

The Political Bureau of Vietnam, the country’s supreme governing body, plays a major role in what goes on inside Vietnam’s economy. They could care less about the health of their economy, their investors, or even the wellbeing of their own people. The only thing they care about is maintaining power and filling their own pockets with foreign investment money. It is a sad truth, but much of the money that should be circulating within the Vietnamese economy is actually flowing right into the bank accounts of Vietnam’s so-called leaders.

Vietnam’s double-digit inflations and bankruptcy of major companies are all due to the fact that their powerful statesmen do not know how to run the economy. Nguyen Tan Dung has no business trying to shape Vietnam’s economic policy. He’s a billionaire, with no qualifications whatsoever, where does all the money come from? Men such as him are the reasons why China is so free to bully their way across the Eastern Sea. After all, the Chinese Communists are the ones paying off the Politburo in Vietnam, contributing to the repression of the Vietnamese people, and the woes of Vietnam’s economy.

Anyone seeking substantial evidence of Vietnam’s unstable economy may want to take a look at the current state of Vinashin, the country’s state-run shipbuilding corporation. What was meant to be Vietnam’s first great leap into the industrial era has turned out to be a major fiasco. Vinashin was the Communist Party’s attempt to lead Vietnam’s economy into the shipbuilding arena. The had hoped to create more heavy industries in Vietnam, with Vinashin at the forefront of this path to modernization. Unfortunately for them, this dream will not become a reality. Vinashin has run up a debt of $4.4 billion, with $600 million of this money owed to foreign investors.

As a state-run company, Vinashin was depending on some government assistance to keep the company afloat. However, at least to the company’s surprise, the government did not come to their assistance. In 2007, the government sent a letter to Vinashin that expressed their support for the company, safeguarding a $600 million loan from foreign investors. This promise meant nothing, it turns out. When Vinashin encountered financial troubles as a result of the recent global recession, the government failed to provide help to the company. As a result, Vinashin was unable to repay its ever growing debts, and drew even closer to bankruptcy.

The incompetence of the Communist government, along with the company’s personnel, have led to the downfall of the shipbuilding corporation. Foreign investors and lenders now believe that they have been cheated by the VCP. With billions of dollars in debt and no sign of improvement, the Vinashin shipbuilding company has no way to repay their investors, who are demanding their money back. Economically, Vinashin is a prime example of how incapable the Communist Party is of building a functional corporation for the country. With no emphasis on creating a professional workforce or the training of competent employment, any attempt by the state to modernize the economy will surely end in failure.

Analysts often observe the increasing economic growth of Vietnam, pointing out the country’s expansion in the workforce and international trade. It seems good on the surface, right? To most liberal democracies, a growing economy and increased productivity usually means a better quality of life for the citizens and the country as a whole. However, the situation in Vietnam is not so simple.

There is a major problem arising in attempting to measure economic growth in Communist Vietnam: corruption. According to the New York Times, Vietnam ranks 116th on the Transparency International Corruption Index (TICI). This poor rating on the TICI means that the country is still too shady a place for foreign investor to conduct big business deals. Therefore, even though Vietnam is starting to become a more attractive place for business people, many still question the country’s ability to protect investors.

Statistics and investors aside, let’s examine how the corruption impacts the people. Even though the economy of Vietnam may be on the rise, the majority of the country’s profits tend to flow into the pockets of the VCP. The top leaders in the Political Bureau of the Communist Party are insanely wealthy. Nguyen Tan Dung, the Prime Minister of Vietnam, is a very rich man with a hefty bank account holding more than a billion dollars. He’s not a business man, he’s not an entrepreneur, where does his wealth come from?

It appears Vietnam has become a commodity in recent years that many foreign countries are considering doing business with. The population is currently 87 million people, foreign investment is on the rise, and many consider Vietnam a good alternate to markets in China. However, the country is still riddled with problems. Vinashin, a major state-owned shipping company worth billions of dollars, went bankrupt just several months ago, Bauxite mining still exists, and let’s not forget about Paracel and Spratly and the fishermen in the Southeast Asia Sea.

Vietnam has some very real opportunities for major economic growth and development, I acknowledge that. However, they can only be utilized if the leaders wake up and fix the detrimental problems that plague the country today. The only way for Vietnam to achieve true economic stability and growth is if the old problems were properly handled. Purge the government of corruption, end the Bauxite projects, judge workers based on talent and skill rather than elegance to the Party, and take back Paracel and Spratly. Only when the VCP gain the courage to address these issues can real progress be achieved.

*FYI: This is Freedom For Vietnam’s 100th post! Best wishes to all you readers as 2010 comes to a close. We will continue to fight in the name of freedom and democracy on behalf of everyone oppressed by dictatorships all around the world. Thanks for visiting! See you in 2011!